Daily Chartbook #218
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Daily Chartbook #218
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Mortgage demand. "First week in 5 that MBA mortgage applications rose (+7.2%). Both the purchase (+7.6%) and refinance (+6%) sub-indices were up while 30yr fixed mortgage rates rose 7bps during the week and remained above 7%."
2. Tender rejections (I). "'Tender Reject' index from Freight Waves index shows # of loads truckers choose not to accept (selectivity in good times, 'take what they can get' in bad times); low # means spot market truckers are more desperate for loads."
3. Tender rejections (II). "LA sets the tone for the rest of the country. Tender rejections have started to show some life out of LA, breaking +4% (was 1% in early February). It's too early to call it a come-back but suggests some of the capacity has bled out of the market, providing a floor."
4. Household debt. "US household debt grew strongly during the pandemic, but the growth rate is starting to slow. Why? Two reasons: (i) the cost of credit has gone up, and (ii) the availability of credit has gone down."
5. Consumer credit. Interest payments "are now the highest since before 08-09 recession"… which "will limit growth, just as the Fed planned when it started hiking rates."
6. Misery Index. "Misery rate (which combines CPI y/y and unemployment rate) fell to 7.7% in May, lowest since beginning of 2021."
7. Greedflation. "Greedflation, in keeping profits higher for longer, has delayed the recession. Greedflation, is consequently dampening the magnitude of the current investment downturn."
8. IPO issuance. "Our GS IPO Issuance Barometer has risen to 93, a level consistent with the typical frequency of IPOs. .. Our baseline forecasts point to a further improvement in the IPO environment in 2H 2023."
9. PPI (I). Headline PPI declined 0.3% MoM in May (vs. -0.1% expected, +0.2% prev) while core PPI rose 0.2% (in-line, unchanged).
10. PPI (II). On a YoY basis, headline PPI increased 1.1% (vs. 1.5% expected, 2.3% prev), the lowest since December 2020. Core PPI rose 2.8% (vs. 2.9% expected, 3.2% prev), the lowest since February 2021.
11. New FOMC SEP projections. "Interest rates are expected to be higher. Unemployment rates are expected to be slightly lower. Headline inflation is expected to be slightly lower. Real GDP is expected to be higher in 2023 and lower in 2024/2025."
See:
12. FOMC Dot Plot. "Cognitive dissonance at the Fed. New Fed dot plot implies TWO more 25bps rate hikes to a terminal rate of 5.6%."
13. Oil demand. "Global growth in fuel consumption will dwindle to just 400,000 barrels a day in 2028...Global demand will reach 105.7 million barrels a day by that point."
14. US petroluem inventories. "Third consecutive US weekly total commercial petroleum inventory build of more than 10 million barrels, with 7.9 MMbbl coming from crude alone. Gasoline and diesel stocks also up ~2.1 million barrels each."
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15. FMS vs. energy. "Fund managers have soured on energy stocks."
16. Gold vs. ERP, DXY. "Gold is outperforming the US equity risk premium and its typical inverse correlation with the dollar."
17. Risk aversion. "Risk aversion eased sharply among US equity investors in June, with the views on market returns becoming substantially less negative according to the June S&P Global Investment Manager Index."
18. Investor Intelligence sentiment. "II bulls continue to rise & bears contract. Stocks typically do well when optimism is expanding (bull-bear spread >20) but not yet excessive."
See:
19. Speculative positioning. "US equity speculative futures positioning ticking up from near-record lows as the market runs away... minds are starting to change as FOMO kicks in and price speaks louder than macro. Looking more like 2011 (vs 2007)."
See: ,
20. FMS positioning. "The BofA Global Fund Manager survey saw a big jump in alts last month. Real estate as well."
21. June rotation. "Over the past month, they rotated into Japan the most, followed by US shares and telecommunications, and out of cash, staples, and emerging markets."
22. FMS vs. equities. FMS investors are net 32% underweight equities.
23. CTAs vs. equities. "US CTA Equity Exposure: $39 Billion. This is an increase of $20 Billion since April 1st. This ranks in the 99th percentile in the past 1-year."
24. Megacap tech vs. financials. "Last week’s net buying across PB in Global Financials...ranked in the 98th percentile vs. the past five years (only behind Feb ’21 and Oct ’20). The offset: selling of Mega cap tech."
25. Megacap options. "Demand for call options on mega-cap stocks keeps rising."
26. Calls vs. puts. Yesterday, "47 million options traded across all exchanges with calls outpacing puts by almost 1.5x, the second highest since April 2022."
27. Margin debt. Margin debt remains depressed despite the recent rally in stocks.
28. Corporate profits. "On an absolute basis, corporate profits have started to decline, but not very quickly."
29. SPX price & EPS path. "Goldman Sachs raised its price target for the S&P 500 to 4,700 in the next 12 months."
30. SPX valuations. And finally, “most S&P 500 stocks are valued in line with historical recession valuations.”
Thanks for reading!
Daily Chartbook #218
I hope I’m the only one: I feel like I could enjoy these wonderful and consistent chats more, if once in a week or month or as a page, definition of terms frequently appearing on chats as explainer could be used. May be newbies were not the audience, but I believe some of us that stumbled here could get some education.
I often come here, open links to read and end up at investopedia or more if a rabbit hole
I think there are a billion Indians who want air conditioners that beg to differ with the IEA forecast in #13.